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Taxing tires hurts poor consumers
By Zhao Jing |
September 28, 2009, Monday
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THE US government's decision to impose tariff on some Chinese imported tires will definitely affect American consumers, said Richard Wottrich, a Chicago-based international business expert.
Wottrich, managing director, International at Dresner Partners, said in an interview on Wednesday: "If you are a young mom working two jobs and driving a paid- or old clunker to make ends meet, you probably couldn't afford the new car required to get into the 'Cash for Clunkers' program. Well now your tires will get more expensive."
Wottrich has over 30 years experience in the financial services industry and has closed transactions in 15 countries, including initiating M&A transactions in China.
When commenting on the protectionism, Wottrich said: "It is important that we remain pragmatic regarding protectionism. In a raging recession there will always be pressures to protect domestic industries. By the same token China has every right to protest if a particular tariff is perceived as unfair."
Wottrich hopes that this one tariff should not harm Chinese-US trade relations. However, he said if the Obama administration continues with other tariffs, it would be a different story.
He further said that US-based tire companies import roughly 17 percent of their tires (46 million last year) from China and these tires represent the low-end of the price spectrum at US$50 to US$60 per tire. This will hit the remaining US manufacturers hard as well, Goodyear and Cooper, as they also make tires in China.
Wottrich said China and the United States need to develop an expansive and reasoned ability to work with one another because the two countries will lead the way into the latter half of this century and it is no one's best interests to have unreasonably conflicts between them.
Earlier this month, the Obama administration announced it would impose tariffs of up to 35 percent over the next three years on Chinese tires for cars and light trucks. The tariff, which took effect on September 26, represents the first such case under the law for Obama.
The Chinese government has said that it is strongly opposing the trade protectionism by the United States.
(The author is a senior writer at Xinhua news agency.)
Wottrich, managing director, International at Dresner Partners, said in an interview on Wednesday: "If you are a young mom working two jobs and driving a paid- or old clunker to make ends meet, you probably couldn't afford the new car required to get into the 'Cash for Clunkers' program. Well now your tires will get more expensive."
Wottrich has over 30 years experience in the financial services industry and has closed transactions in 15 countries, including initiating M&A transactions in China.
When commenting on the protectionism, Wottrich said: "It is important that we remain pragmatic regarding protectionism. In a raging recession there will always be pressures to protect domestic industries. By the same token China has every right to protest if a particular tariff is perceived as unfair."
Wottrich hopes that this one tariff should not harm Chinese-US trade relations. However, he said if the Obama administration continues with other tariffs, it would be a different story.
He further said that US-based tire companies import roughly 17 percent of their tires (46 million last year) from China and these tires represent the low-end of the price spectrum at US$50 to US$60 per tire. This will hit the remaining US manufacturers hard as well, Goodyear and Cooper, as they also make tires in China.
Wottrich said China and the United States need to develop an expansive and reasoned ability to work with one another because the two countries will lead the way into the latter half of this century and it is no one's best interests to have unreasonably conflicts between them.
Earlier this month, the Obama administration announced it would impose tariffs of up to 35 percent over the next three years on Chinese tires for cars and light trucks. The tariff, which took effect on September 26, represents the first such case under the law for Obama.
The Chinese government has said that it is strongly opposing the trade protectionism by the United States.
(The author is a senior writer at Xinhua news agency.)
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